The Marketing of the Ultra-premium Whiskeys

Today's story comes from Foodie & blogger-extraodinaire, Kate Hopkins, the brains behind Accidental Hedonist.

Kate's been getting into our favorite beverage lately and has a great take on the 'surgence' (yeah, yeah, I know - that's not a word) of premium Bourbon.

There's the feeling out there that Scotch drinkers don't like Bourbon and that Bourbon drinkers don't go near Scotch. Speaking from my personal experience and the people that I meet, that's simply not true.

If you know a Scotch snob who looks down his nose at Bourbon, kick him in the nuts and find some new friends.

Coming in 2008 we'll devote a substantial chunk of time to Bourbon. And my annual whisky tasting this year will be focusing on non-Scotch whiskies (yes, like Bourbon), so look for that story. But to whet your appetite for the U.S's official liquor, here's Kate...

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The Marketing of the Ultra-premium Whiskeys
Accidental Hedonist, November 29, 2007
by Kate Hopkins

Eric Asimov, the drink writer at the New York Times, takes a look at bourbon and its increase in popularity.

The dive in sales forced bourbon producers to accept that the whiskey market had changed. They might not be able to compete with vodka, but to avoid permanent relegation to the dusty back shelves of liquor stores, bourbon producers would have to find a way to attract the budding connoisseur class.

For me, this evolution in the whiskey industry here in America is quite fascinating. For all of this talk of "tradition" and "history" in the Kentucky/Tennessee whiskey industries, the fact remains that these companies didn't really hit their stride until our own lifetime. Around the fifties and sixties, Canadian Whisky was the popular drink. Then Jack Daniels and Jim Beam hit their stride in the sixties and seventies, mostly from the fact that they had good financial backing, decent marketing, and the ability to get into markets that other distillers could not. No where on this list is the phrase "devoted to the quality of the product".

The drinks from these places were good enough to get by, but once single malts from Scotland began hitting the American Market, only then did they realize that a better product will lead to better sales. Here came a competitor that marketed themselves as "sophisticated" and their distillers as "craftsmen". With some of the Scotches out there this was (and still is) pure hype. But there were (and are) some Scotches that could back up the words coming out of marketing. Jim Beam and Jack Daniels, with their distilling processes almost fully industrialized to the point where the craft of distilling was nearly an afterthought, simply could not back up any similar claim.

Or to put it another way, the Bourbon industry got schooled by the Scotch, both in terms of quality and of marketing. 

Thus all the recent introductions of new bourbons that have been marketed as "crafted". In my own experience, some are worthy, some are not. My own favorite, if I were to drink Bourbon regularly (which I currently don't, because of all the research into other whiskeys) would be Bulleit, while I would bring (and have brought) out Jim Beam's Basil Hayden to introduce new comers to the world of good bourbon. But admittedly, I have yet to try many on the list favored by Asimov's reviewers, but I hope to rectify that within the next few months.

Meanwhile, the Canadian Whisky industry, truly the last whisky "varietal" to acknowledge the allure and benefit of Ultra-premium whiskeys, has been left reeling. In talking with the folks up north last week, they've lost market share every year for the past fifteen years. That is not a good trend, especially when compared against the following:

From 2002 to 2006, sales of bourbon and Tennessee whiskey rose by 12.23 percent. In the same period, sales of high-end whiskeys ($20 to $30) rose by 27.62 percent and sales of superpremium bourbons (above $30) rose by 60.52 percent.

The only thing that has saved the Canadian Whisky industry was the fact that their market share was so huge back fifteen years ago that they could afford to lose customers. But clearly this trend is not sustainable for them.

Like I said, I find this stuff fascinating.

Comments

[lawschooldrunk]

I used to look down at bourbon while having drams of islay single malt scotch.

Then I realized there must be something to bourbon. I asked an acquaintance for some and he gave me a 16 year old Hirsch. man, that stuff was good. This was a wake up call. I kicked myself in the nuts.

I've since tasted most of the staples of bourbon: blantons, bookers, bakers, makers, buffalo, elijah, knob, stagg, eagle...

While I predominantly drink single malt, I now definitely appreciate a good bourbon.

So, put down that islay or speyside, kick yourself in the balls, and have a bourbon. you never know...maybe you'll grow new ones.

[Rick]

Though the numbers are telling, I'm not completely convinced by them. Sure, the Superpremium market grew 60%, but that's because the category barely existed in 2002 and the sheer amount of whiskey's that launched in that category is going to inflate that number.

But yes, let's hear it for Bourbons! I could drink Blanton's everyday for the rest of my life.

Well, I guess my life would be short though, drinking bourbon everyday and whatnot...

[lee]

I can't help but agree that there is plenty of choice and room to enjoy both scotch and bourbon. Jim Beam and Jack Daniels are definitely products of my parents generation(I'm 40).

In the last 15 years, I have progressed from Crown, Wild Turkey, Maker's Mark, JB scotch, then to single malts. After starting with Ardbeg and trying at least 75 different single malts over the last 8 years, I've got a number that I always fall back to; Lagavulin, Macallan's 10 year fine oak cask, and a new one, Costco's 18 year old house brand(made by Macallan). I've also enjoyed Jefferson County and Blantons.

Frankly, I've never understood how you could just select one drink forever. Different drinks for different times. Sitting outside by the pool during summer in Phoenix is no place for a heavy peaty single malt, but perfect for a cigar with the boys sitting around just bs'ing.

[Sku]

I'm a Scotch and Bourbon drinker and I, for one, think the Jim Beam "small batch collection" (Knob Creek, Baker's, Booker's, Basil Hayden) had done more to hurt premium Bourbon than help it.

Because of the massive marketing around the collection, if a newbie Bourbon drinker (including a single malt fan) wants to reach for a premium Bourbon, they'll probably reach for one of these. What's wrong with that?

First, let's be clear that there's nothing small about them...my understanding is that they all come from barrels on the Jim Beam floor that would have otherwise gone into Jim Beam. The marketing campaign around them is a cynical attempt to make the largest Bourbon producer in the US look like a small-time artisan.

Second, they really don't put Bourbon's best foot forward. I find all of them to be indistinct and uninteresting. They are a slightly smoother version of Beam that lack much in the way of distinction. I challenge anyone to do a blind tasting of all four and try to identify which is which.

The sad thing is that the Bourbon newbie who is directed to the Small Batch Collection is missing out on Elijah Craig, Buffalo Trace, Eagle Rare and plenty of other great Bourbon in the same price range. Bourbon can have so much flavor, not just the caramel sweetness of corn, but the deep spice of rye as well as strong notes of tobacco, fruit and oak. A small batch drinker just isn't getting this stuff that a single malt fan would really appreciate.

[McTickle]

I enjoy a good scotch and bourbon. But what about Rye? Rye surely has its place in our liquor cabinets too, no?

[Mark Taylor]

To all scotch snobs, don't get me wrong I love scotch, but all scotch is aged in bourbon cases first. If you have ever tried the 15 year fine oak Macallan, you will taste a delicious scotch with a good amount of bourbon flavor. Get your hands a Pappy Van Winkle 15 year old bourbon and enjoy.

[Kevin Erskine]

Hi Mark,
Just clarifying.
Not ALL scotch is aged in Bourbon casks first.

There's no "Bourbon flavour" in Scotch, The vanilla; caramel; etc, that you taste is a result of the wood interacting with the whisky - this happens to both Bourbons and Scotch.

If I took a large amount of new make spirit made in Scotland in the traditional way; brought it to Kentucky; placed into a new White Oak charred cask (which had never contained Bourbon; and matured in the same extremes of temps as Bourbons (cold winters; hot summers) the result would still be those rich "Bourbon-esque" you perceive.

[Mark Taylor]

Hello Kevin, I sorry your right, of course not all, but most scotch is aged in bourbon case, I tend to differ about no bourbon taste in scotch, have you ever tasted the Balvenie New Oak 17 year which is a marriage of Bourbon Wood and Sherry Wood. I have a bottle I'm willing to set down and have a dram with you. I was enjoying a dram one night and I set back, and said BOURBON.Let me no if you are ever in my neck of the woods and we can have a drink. BY the way do you enjoy a good Bourbon.

[Kevin Erskine]

Hi Mark,
Hate to disagree with you (again), but my understanding of the Balvenie 17 New Oak was that it is Balvenie that was aged in American white oak casks that previously held Bourbon for 17 years then transferred to NEW American white oak casks - which had never held any spirit.

There's no sherry cask in the mix...and the NEW Oak part sort of proves my point ...the short time in the new wood has brought out those VERY strong flavours that you equate with Bourbon.

Next time I'm up in New Jersey, I'll look you up ;)

I drink alcohol of all sorts. Including Bourbon. I don't limit myself to Scotch; whisk(e)y; or brown Spirits.

I likely drink more beer than any other alcohol...

[Craig Perrine]

I have a bottle of the Balvenie New Oak 17 (and I'm looking for another) and it is aged in Sherry and Bourbon casks and then in the New American Oak...